DT6911 - DT: Falkland Islands: double taxation agreement, Article 12: Royalties

(1) Royalties arising in a territory and paid to a resident of the other territory shall be taxable only in that other territory if such resident is the beneficial owner of the royalties.

(2) The term "royalties" as used in this Paragraph means payments of any kind received as a consideration for the use of, or the right to use, any copyright of literary, artistic or scientific work (including cinematograph films, and films or tapes for radio or television broadcasting), any patent, trade mark, design or model, plan, secret formula or process, or for information (know how) concerning industrial, commercial or scientific experience but does not include royalties or other amounts paid in respect of the right to work, extract or remove natural resources.

(3) The provisions of sub-paragraph (1) of this Paragraph shall not apply if the beneficial owner of the royalties, being a resident of a territory, carries on business in the other territory in which the royalties arise, through a permanent establishment situated therein, or performs in that other territory independent personal services from a fixed base situated therein, and the right or property in respect of which the royalties are paid is effectively connected with such permanent establishment or fixed base. In such case, the provisions of Paragraph 7 or Paragraph 14 of this Arrangement, as the case may be, shall apply.

(4) Where, by reason of a special relationship between the payer and the beneficial owner or between both of them and some other person, the amount of the royalties paid exceeds, for whatever reason, the amount which would have been agreed upon by the payer and the beneficial owner in the absence of such relationship, the provisions of this Paragraph shall apply only to the last-mentioned amount. In such case, the excess part of the payments shall remain taxable according to the laws of each territory, due regard being had to the other provisions of this Arrangement.

(5) The provisions of this Paragraph shall not apply if it was the main purpose or one of the main purposes of any person concerned with the creation or assignment of the rights in respect of which the royalties are paid to take advantage of this Paragraph by means of that creation or assignment.